Wyoming can lead on portable benefits — A new path for workers and businesses

Note: This is a joint op-ed with Liya Palagashvili of the Mercatus Center at George Mason University.

Wyoming just took an important step toward modernizing how work and benefits fit together. Lawmakers have introduced Senate File 41, a bill that would authorize the creation and use of portable benefit accounts for independent contractors—accounts that can pay for benefits like health insurance and retirement, without affecting a worker’s classification.

Crucially, the bill would clarify that such contributions cannot be used as evidence of an employment relationship, reducing legal risk for businesses and opening access to benefits for more workers.

This matters because traditional benefit systems are deeply tied to employment status, even as self-employment continues to grow in Wyoming. More than 65,000 residents earn income outside traditional jobs, generating over $5 billion annually. These workers range from truckers and childcare providers to real estate agents, construction workers, and creative professionals. Yet many lack access to basic benefits—not because they don’t want them, but because current laws make it risky for companies to voluntarily provide support to non-employees.

Under existing rules, offering benefits to an independent worker can be interpreted as creating an employer–employee relationship, potentially triggering costly liabilities and legal risk. As a result, even businesses that want to help often avoid doing so, and workers are left navigating benefit gaps on their own.

A modern Wyoming economy should reflect how people actually work: through self-employment and across multiple clients, contracts, and projects, with benefits that move with the individual rather than remaining tied to a single job. Independent work offers flexibility and opportunity—qualities Wyoming values across its rural communities and small towns—but flexibility shouldn’t require giving up economic security.

Portable benefits offer a solution designed for today’s labor market. Because these benefits are tied to the worker rather than a specific employer, independent workers can receive contributions from multiple clients or companies into a single, worker-owned account. Those funds can then be used to pay for health insurance premiums, retirement savings, or paid time off—without forcing the worker into traditional employment.

Importantly, Wyoming’s portable benefits proposal is voluntary and market-driven. Workers choose whether to participate, and businesses choose whether to contribute. The state’s role is simply to clarify the law and remove barriers that currently prevent cooperation. This approach preserves independence while allowing innovation in benefit design.

The potential benefits extend beyond individual workers. Portable benefits can improve labor-market mobility by reducing the penalty workers face when switching clients or industries. They can also help attract and retain a more stable independent workforce—especially in key Wyoming industries such as construction, transportation, professional services, and health care.

Wyoming’s initiative also fits within a growing national movement. In addition to states like Utah, Alabama, and Tennessee that enacted portable benefits laws last year, similar legislation has already been introduced this year in seven more states, including West Virginia, New Hampshire, Kansas, Florida, Georgia, Mississippi, and Nebraska. These efforts reflect a shared recognition that outdated benefit systems should not stand in the way of modern work arrangements.

Private-sector pilot programs across the country have also shown strong worker interest in benefit models that provide stability without requiring a change in how people work. Surveys consistently find that a large majority of independent workers prefer to remain independent, while also wanting access to benefits that fit their lifestyles.

Wyoming’s approach—allowing independent workers to establish portable benefit accounts and letting willing businesses contribute without triggering reclassification—would bring the law in line with labor-market reality. It removes a major legal obstacle that currently prevents many workers from accessing protections traditionally reserved for W-2 employees.

As Wyoming’s economy continues to evolve, the state has an opportunity to make its labor framework more inclusive, competitive, and adaptable. Portable benefits can help more residents pursue the work they choose, grow their own businesses, and navigate economic change without losing access to essential protections.

In doing so, Wyoming would not just follow a national trend—it would lead by showing that flexibility and security can go hand in hand, and that modern policy can support all who contribute to the state’s economy.

Liya Palagashvili is a senior research fellow and director of labor policy at the Mercatus Center at George Mason University. Jason Mercier is Vice President and Director of Research of Mountain States Policy Center.